The Economic Recovery, What Is Different This Time

Very informative article once again over at the Economist.  I highly encourage you to read it to get a better understanding of how the American economy is changing.  The article is too long to try and go over the whole thing here so I figured we could just take a look at this chart which compares the most recent economic recoveries and what contributed to the growth.

1.  The first thing you notice is how each successive recovery is weaker than the last.

2.  Also notice that in the latest recovery the housing industry contributes nothing to the recovery where as in the previous two it had.  This makes sense because of the housing bubble.

3.  The other major difference is the decline in consumption and the growth in exports.  This had to happen as our trade deficit prior to the meltdown was unsustainable.  Since then it has gone from 6% od GDP to 4% GDP, which is still too high.  For comparison it was only around 1% GDP in the early 90’s.

Besides reading the article you should also check out the reader comments.  It is both entertaining to see how people from around the world view America while at the same time cause for concern because of the misconceptions about the US.

America’s economy

Points of light


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